Actions Clear the Way for Job-Creating Redevelopment at Former Sparrows Point Steelmaking Facility

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Actions Clear the Way for Job-Creating Redevelopment at Former Sparrows Point Steelmaking Facility

Maryland Department of the Environment and U.S. Environmental Protection Agency announce settlements for historic cleanup of Sparrows Point; set the stage for redevelopment and economic revitalization efforts

BALTIMORE, MD (September 18, 2014) — The Maryland Department of the Environment (MDE) and the new owner of the former Sparrows Point steelmaking facility, Sparrows Point Terminal LLC (SPT), have signed an agreement that will lead to the final cleanup of a key environmental site and will facilitate the redevelopment of Sparrows Point.

The United States Environmental Protection Agency (EPA) also reached an agreement with SPT.

Under the terms of the MDE agreement – an Administrative Consent Order – Sparrows Point Terminal, LLC will assume responsibility for the ongoing environmental work and will develop and execute plans to complete cleanup of the 3,100 acre site.

MDE obtained a substantial financial commitment from the company, as well as provisions to ensure that the cleanup of the site remains on schedule.

The Consent Order requires Sparrows Point Terminal LLC to provide MDE with $48 million in financial assurance (a $43 million trust fund and a $5 million letter of credit) to ensure cleanup of the property. Every six months, through an independent engineering firm, SPT will re-evaluate the sufficiency of the financial assurance, and in the event the cleanup is 10 percent or more over budget, SPT will increase funding to the trust to address the shortfall. The Consent Order also includes stipulated financial penalties of up to $5,000 a day for failure to meet any deadlines established in an approved work plan, and requires Sparrows Point Terminal LLC to pay MDE’s oversight and response costs up to $100,000 per year.

Sparrows Point Terminal LLC has also agreed to provide the U.S. Environmental Protection Agency (EPA) with $3 million to perform additional offshore investigation and, if necessary, offshore remediation.

Concurrent with the signing of the Administrative Consent Order, EPA today issued public notice that the agency proposes to enter into a Prospective Purchaser Agreement (PPA) with Sparrows Point Terminal LLC. When finalized, the PPA will resolve potential federal environmental claims in exchange for the company’s performance of all required work under MDE’s Administrative Consent Order and payment of $3 million to be used exclusively to address off-shore contamination. In order to maximize the efficient use of regulatory agency resources, MDE, EPA and Sparrows Point Terminal have agreed that EPA will assume primary responsibility for implementing work offshore, working closely in consultation and cooperation with MDE, while MDE will assume primary responsibility for overseeing implementation of the onshore work in consultation and cooperation with EPA.

The two agreements pave the way forward for the planned redevelopment of the property into a hub for port-related, energy, advanced manufacturing and distribution uses.

“Our priority is redeveloping the Sparrows Point property to grow the economy and put people back to work,” said Governor Martin O’Malley. “This agreement addresses the need to complete the cleanup of the site – and it is a crucial step towards making this site an economic force and source of jobs for years to come. I’d like to thank Secretary Summers and his team at MDE, along with the Attorney General’s office, in particular MDE attorneys Matthew Zimmerman and Sari Levin, for their hard work on this matter.”

“Today’s announcement is an important milestone in the revitalization of Sparrows Point, Baltimore County and our State,” saidLieutenant Governor Anthony G. Brown. “For many years Sparrows Point was an anchor for our nearby communities – with this step forward, the Point will again become a place that creates strong middle class jobs, supports a growing economy and makes the Port of Baltimore an even more attractive place to do business.”

“The Sparrows Point property is perhaps the most complex cleanup site in the Chesapeake Bay watershed,” said MDE Secretary Robert M. Summers. “A lot of progress has been made toward cleaning up the effects of more than a hundred years of steelmaking, and we now have a clear path to completion of this important job. Because of the size and history of this property, MDE insisted on a strong, enforceable agreement to provide an extraordinary level of protection for the environment and public health. The Consent Order ensures that the purchaser, rather than taxpayers, will pay the full cost of the cleanup, including oversight costs.”

“Today, I am pleased to report that the future for returning thousands of family-supporting jobs to Sparrows Point looks brighter than it has in many decades. We are encouraged that the new local ownership group has reached an agreement with the Maryland Department of the Environment and the EPA that clears the first hurdle to redevelopment of this important industrial property,” said Baltimore County Executive Kevin Kamenetz. “I want to commend the O’Malley Brown Administration for leading these clean up efforts so essential to the rebirth of the peninsula. Sparrows Point is poised to once again be a vibrant economic engine for Baltimore County and the entire region.”

“As advocates for the Port, business, and real estate sectors, we recognize that dealing with environmental issues is a critical first step to leveraging the potential of Sparrow’s Point. We appreciate the commitment of the new owners, the State, and Baltimore County to addressing the challenges at Sparrow’s Point in a thoughtful, responsible way. Coordination and collaboration is vital to moving this project forward,” said Donald C. Fry, Greater Baltimore Committee President & CEO.

The Consent Order became effective today upon sale of the property to Sparrows Point Terminal LLC. The EPA’s proposal to enter into a Prospective Purchaser Agreement is subject to a 30-day comment period.